INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)

AND
AMENDMENTS THERETO FILED PURSUANT TO RULE

13d-2(a)

The
Westaim Corporation

(Name of
Issuer)

Common
Stock

(Title of
Class of Securities)

956909105

(CUSIP
Number)

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

(416)
365-2155

(Name,
Address and Telephone Number of Person

Authorized
to Receive Notices and Communications)

February
28, 2008

(Date of
Event which Requires Filing of this
Statement)

If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box ¨.

The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(the “Act”) or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).

CUSIP:
956909105

13D

Page
2 of 13

1

names
of reporting persons

THE K2 PRINCIPAL FUND,
L.P.

2

check
the appropriate box if a member of a group(A)

(A)
o

(B) o

3

sec
use only

4

source
of funds

WC

5

check
if disclosure of legal proceedings is required pursuant to items 2(d) or
2(e)

o

6

citizenship
or place of organization

Ontario,
Canada

number
of

shares

beneficially

owned
by

each

reporting

person

with

7

sole
voting power

0

8

shared
voting power

15,412,584

9

sole
dispositive power

0

10

shared
dispositive power

15,412,584

11

aggregate
amount beneficially owned by each reporting person

15,412,584

12

check
box if the aggregate amount in row (11) excludes certain
shares

o

13

percent
of class represented by amount in row (11)

16.4%*

14

type
of reporting person

PN

* Based
on 94,135,535
shares of common stock of the Westaim Corporation reported outstanding on the
issuer’s Annual Report on Form 20-F for the fiscal year ended December 31,
2007.

CUSIP:
956909105

13D

Page 3 of
13

1

names
of reporting persons

K2
GENPAR, INC.

2

check
the appropriate box if a member of a group

(A)
o

(B) o

3

sec
use only

4

source
of funds

OO

5

check
if disclosure of legal proceedings is required pursuant to items 2(d) or
2(e)

o

6

citizenship
or place of organization

Ontario,
Canada

number
of

shares

beneficially

owned
by

each

reporting

person

with

7

sole
voting power

0

8

shared
voting power

15,412,584

9

sole
dispositive power

0

10

shared
dispositive power

15,412,584

11

aggregate
amount beneficially owned by each reporting person

15,412,584

12

check
box if the aggregate amount in row (11) excludes certain
shares

o

13

percent
of class represented by amount in row (11)

16.36%*

14

type
of reporting person

CO

* Based
on 94,135,535
shares of common stock of the Westaim Corporation reported outstanding on the
issuer’s Annual Report on Form 20-F for the fiscal year ended December 31,
2007.

CUSIP:
956909105

13D

Page 4 of
13

1

names
of reporting persons

SHAWN
KIMEL

2

check
the appropriate box if a member of a group

(A)
o

(B) o

3

sec
use only

4

source
of funds

OO

5

check
if disclosure of legal proceedings is required pursuant to items 2(d) or
2(e)

o

6

citizenship
or place of organization

Ontario,
Canada

number
of

shares

beneficially

owned
by

each

reporting

person

with

7

sole
voting power

0

8

shared
voting power

15,412,584

9

sole
dispositive power

0

10

shared
dispositive power

15,412,584

11

aggregate
amount beneficially owned by each reporting person

15,412,584

12

check
box if the aggregate amount in row (11) excludes certain
shares

o

13

percent
of class represented by amount in row (11)

16.36%*

14

type
of reporting person

IN

* Based
on 94,135,535
shares of common stock of the Westaim Corporation reported outstanding on the
issuer’s Annual Report on Form 20-F for the fiscal year ended December 31,
2007.

CUSIP:
956909105

13D

Page 5 of
13

1

names
of reporting persons

K2
& ASSOCIATES INVESTMENT MANAGEMENT INC.

2

check
the appropriate box if a member of a group

(A)
o

(B) o

3

sec
use only

4

source
of funds

OO

5

check
if disclosure of legal proceedings is required pursuant to items 2(d) or
2(e)

o

6

citizenship
or place of organization

Ontario,
Canada

number
of

shares

beneficially

owned
by

each

reporting

person

with

7

sole
voting power

0

8

shared
voting power

15,412,584

9

sole
dispositive power

0

10

shared
dispositive power

15,412,584

11

aggregate
amount beneficially owned by each reporting person

15,412,584

12

check
box if the aggregate amount in row (11) excludes certain
shares

o

13

percent
of class represented by amount in row (11)

16.36%*

14

type
of reporting person

CO

* Based
on 94,135,535
shares of common stock of the Westaim Corporation reported outstanding on the
issuer’s Annual Report on Form 20-F for the fiscal year ended December 31,
2007.

CUSIP:
956909105

13D

Page 6 of
13

1

names
of reporting persons

SHAWN KIMEL INVESTMENTS,
INC.

2

check
the appropriate box if a member of a group

(A) o

(B) o

3

sec
use only

4

source
of funds

OO

5

check
if disclosure of legal proceedings is required pursuant to items 2(d) or
2(e)

o

6

citizenship
or place of organization

Ontario,
Canada

number
of

shares

beneficially

owned
by

each

reporting

person

with

7

sole
voting power

0

8

shared
voting power

15,412,584

9

sole
dispositive power

0

10

shared
dispositive power

15,412,584

11

aggregate
amount beneficially owned by each reporting person

15,412,584

12

check
box if the aggregate amount in row (11) excludes certain
shares

o

13

percent
of class represented by amount in row (11)

16.36%*

14

type
of reporting person

CO

* Based
on 94,135,535
shares of common stock of the Westaim Corporation reported outstanding on the
issuer’s Annual Report on Form 20-F for the fiscal year ended December 31,
2007.

CUSIP:
956909105

13D

Page 7 of
13

ITEM
1.

SECURITY
AND ISSUER.

This
statement on Schedule 13D relates to the shares of common stock (the “Common
Stock”), of the Westaim Corporation, (the “Issuer” or “Company”), with its
principal offices at 144 – 4th Avenue, S.W., Suite 1010 Calgary,
Alberta T2P 3N4, Canada.

ITEM
2.

IDENTITY
AND BACKGROUND.

(a), (b),
(c) and (f)

The
persons filing this statement are Shawn Kimel (“Kimel”), The K2 Principal Fund,
L.P., an Ontario limited partnership (the “Fund”), K2 GenPar, Inc., an Ontario
corporation (the “GP”) and wholly owned subsidiary of K2 & Associates
Investment Management Inc., an Ontario corporation (“Management”) and
majority-owned subsidiary of Shawn Kimel Investments, Inc., an Ontario
corporation (“SKI,” and together with Kimel, the Fund, the GP, and Management,
the “Reporting Persons”).

Mr. Kimel
is president of each of Management, SKI, and the GP, and the GP is the general
partner of the Fund.

The
address of the principal business office of each of the Reporting Persons is 444
Adelaide West, Toronto, Ontario, M5V 1S7.

The names
and business addresses of the directors and executive officers of each of the
GP, Management, and SKI are set forth on Attachment I to this
Schedule 13D and incorporated herein by reference. All persons named on Attachment I to this
Schedule 13D are citizens of Canada.

(d) and
(e)

During
the last five years, none of the Reporting Persons (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.

ITEM
3.

SOURCE
AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION.

Since February 27, 2008, the Reporting
Persons have acquired beneficial ownership of an additional 11,712,800 shares of
Common Stock, net of any sales of shares of Common Stock. The source of cash
funds for the 11,712,800 purchased shares of Common Stock was working capital of
the Fund, and the amount of funds, net of the proceeds of any sales of shares of
Common Stock, totaled approximately $2,700,000.00.

ITEM
4.

PURPOSE
OF TRANSACTION.

The
Reporting Persons have acquired the voting shares for investment
purposes. Except as set forth below, the Reporting Persons have no
present plans or proposals that relate to or that would result in any of the
following actions:

(a)

The
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the
Issuer;

(b)

An
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its
subsidiaries;

(c)

A
sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries;

CUSIP:
956909105

13D

Page 8 of
13

(d)

Any
change in the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the
board;

(e)

Any
material change in the present capitalization or dividend policy of the
Issuer;

(f)

Any
other material change in the Issuer’s business or corporate
structure;

(g)

Changes
in the Issuer’s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Issuer by
any person;

(h)

Causing
a class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;

(i)

A
class of equity securities of the Issuer becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Act;
or

(j)

Any
action similar to any of those enumerated
above.

The
Reporting Persons (or representatives thereof) met with the Chairman of the
Board of Directors of the Issuer on one occasion, and discussed (a) the possible
need on the part of the Issuer to add more independent directors to its Board
and (b) publicly available information regarding the Issuer and its business
plan.

The
Reporting Persons, as stockholders of the Issuer, will continue to evaluate the
Issuer’s business, prospects and financial condition, the market for the Common
Stock, monetary and stock market conditions, and other further developments, and
will continue to participate in meetings or hold discussions with the Issuer’s
management, other stockholders, and other persons, regarding the operations,
assets, capital structure, or ownership of the Issuer. Such
discussions may relate to one or more of the transactions specified in clauses
(a) through (j) above. The Reporting Persons may determine to acquire
additional Common Stock through open market purchases or otherwise, sell Common
Stock through the open market or otherwise, or otherwise engage or participate
in a transaction with the purpose or effect of changing or influencing the
control of the Issuer. Such transactions may take place at any time
and without prior notice. There can be no assurance, however, that
any Reporting Person will take any such actions. The Reporting
Persons reserve the right to change their intentions and to develop plans or
proposals that could result in any of the transactions described in
subparagraphs (a) through (j) above, or any other transaction which the
Reporting Persons believe could enhance stockholder value.

(a) As
of the date hereof, the Fund beneficially owns 15,412,584 shares of Common
Stock, representing approximately 16.4% of the Issuer’s outstanding shares of
Common Stock. The Fund’s sole general partner is the GP, which is the
wholly-owned subsidiary of Management, which is the majority-owned subsidiary of
SKI, 100% of which is owned by Kimel, and therefore, each of the GP, Management,
SKI, and Kimel may be deemed to beneficially own, in the aggregate, 15,412,584
shares of Common Stock, representing approximately 16.4% of the Issuer’s
outstanding shares of Common Stock. The percentage of the Issuer’s
outstanding shares of Common Stock is based on based on 94,135,535 shares of common stock
of the Issuer reported outstanding on the issuer’s Annual Report on Form 20-F
for the fiscal year ended December 31, 2007.

(b) Each
of the Reporting Persons has shared voting and dispositive power over the shares
described in (a) above.

CUSIP:
956909105

13D

Page 9 of
13

(c) Transactions
by the Reporting Persons effected in Common Stock that have taken place since
sixty days prior to that date on which the Reporting Persons obtained ownership
of at least 5% of the Common Stock are listed in Attachment II.

(d) Not
applicable.

(e) Not
applicable.

ITEM
6.

CONTRACTS,
ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES
OF THE ISSUER.

Other
than as described herein, there are no contracts, arrangements, understandings
or relationships among the Reporting Persons and between the Reporting Persons
and any other Person with respect to securities of the Issuer.

ITEM
7.

MATERIAL
TO BE FILED AS EXHIBITS.

10.1

Joint
Filing Agreement By and Among Reporting Persons

CUSIP:
956909105

13D

Page 10 of
13

SIGNATURES

After
reasonable inquiry and to the best of the knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.

Date: April 15, 2009

THE
K2 PRINCIPAL FUND, L.P.

By:
K2 GENPAR, INC.

Its:
General Partner

/s/ Shawn
Kimel

Shawn
Kimel, President

K2
GENPAR, INC.

By:

/s/ Shawn
Kimel

Shawn
Kimel, President

K2
& ASSOCIATES INVESTMENT MANAGEMENT INC.

By:

/s/ Shawn
Kimel

Shawn
Kimel, President

SHAWN
KIMEL INVESTMENTS, INC.

By:

/s/ Shawn
Kimel

Shawn
Kimel, President

/s/ Shawn
Kimel

Shawn Kimel, in his
individual capacity

CUSIP:
956909105

13D

Page 11 of
13

ATTACHMENT
I

The name
and business addresses of the directors and executive officers of
K2 GenPar, Inc. are as follows:

DIRECTORS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Norman
Kumar

444
Adelaide West, Toronto, Ontario, M5V 1S7

EXECUTIVE
OFFICERS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Norman
Kumar

444
Adelaide West, Toronto, Ontario, M5V 1S7

The name
and business addresses of the directors and executive officers of
K2 & Associates Investment Management Inc. are as
follows:

DIRECTORS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Ron
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Warren
Kumar

444
Adelaide West, Toronto, Ontario, M5V
1S7

EXECUTIVE
OFFICERS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Ron
Kimel

444
Adelaide West, Toronto, Ontario, M5V 1S7

Warren
Kumar

444
Adelaide West, Toronto, Ontario, M5V
1S7

The name
and business addresses of the directors and executive officers of
Shawn Kimel Investments, Inc. are as follows:

DIRECTORS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V
1S7

EXECUTIVE
OFFICERS

Name

Business Address

Shawn
Kimel

444
Adelaide West, Toronto, Ontario, M5V
1S7

CUSIP:
956909105

13D

Page
12 of 13

Attachment
II

Reporting
Persons’ Transactions in Common Stock Since December 30, 2007

Open-market
sales are indicated in italics. All other transactions were open-market
purchases. For dates on which shares were purchased or sold at multiple
per-share prices, weighted average price is given. The Fund agrees to provide,
upon request by the Securities Exchange Commission, the Westaim Corporation, or
a stockholder of the Westaim Corporation, full information regarding the number
of shares purchased and sold at each separate price. Per share prices
exclude commissions.

Trade

Date

#
of

Shares

Average

Price/Per
Share

Trade

Date

#
of

Shares

Average

Price/Per
Share (CAD$)

1/7/2008

10,000

$0.3000

9/8/2008

-10,000

$0.2550

2/28/2008

2,000,000

$0.2400

9/19/2008

5,000

$0.2050

4/10/2008

1,000,000

$0.2300

9/22/2008

8,000

$0.2250

5/13/2008

285,000

$0.2441

9/23/2008

9,000

$0.2250

5/14/2008

10,000

$0.2500

9/29/2008

150,000

$0.2600

5/15/2008

10,000

$0.2500

9/30/2008

8,700

$0.2100

5/16/2008

1,500

$0.2500

10/1/2008

11,500

$0.2600

5/20/2008

173,000

$0.2494

10/6/2008

20,000

$0.2050

5/21/2008

206,000

$0.2462

10/17/2008

112,000

$0.1955

5/22/2008

334,500

$0.2445

10/20/2008

43,000

$0.2000

5/23/2008

28,000

$0.2400

10/22/2008

8,000

$0.2000

5/26/2008

128,500

$0.2436

10/23/2008

625,500

$0.1992

5/28/2008

10,000

$0.2450

10/24/2008

150,000

$0.1800

5/30/2008

5,500

$0.2600

10/30/2008

7,500

$0.1600

6/2/2008

6,500

$0.2500

11/5/2008

70,500

$0.1600

6/3/2008

15,000

$0.2500

11/6/2008

64,500

$0.1550

6/4/2008

92,500

$0.2500

11/19/2008

50,000

$0.1850

6/5/2008

40,000

$0.2500

11/20/2008

1,295,600

$0.1900

6/6/2008

26,500

$0.2500

11/25/2008

10,000

$0.1950

6/9/2008

30,000

$0.2500

11/27/2008

796,000

$0.2100

6/16/2008

67,000

$0.2500

12/2/2008

-65,000

$0.2412

6/19/2008

20,000

$0.2500

12/2/2008

153,500

$0.2235

6/27/2008

18,000

$0.2300

12/10/2008

2,000

$0.2450

7/15/2008

7,500

$0.2150

12/11/2008

178,500

$0.2538

7/22/2008

19,000

$0.2100

12/12/2008

172,000

$0.2529

7/25/2008

36,000

$0.2450

12/15/2008

378,000

$0.2524

7/28/2008

4,000

$0.2450

12/16/2008

235,000

$0.2497

7/29/2008

40,000

$0.2450

12/18/2008

207,800

$0.2500

8/7/2008

27,000

$0.2750

12/19/2008

19,500

$0.2500

8/29/2008

4,000

$0.2350

12/22/2008

209,700

$0.2550

9/3/2008

359,000

$0.2094

3/3/2009

2,355,000

$0.2401

9/4/2008

1,000

$0.2050

EX-10.1
2
v146298_ex10-1.htm
Unassociated Document

CUSIP:
956909105

13D

Page 13 of
13

Exhibit
10.1

JOINT
FILING AGREEMENT PURSUANT TO RULE 13d-1(k)

The
undersigned acknowledge and agree that the foregoing statement on Schedule 13D
is filed on behalf of each of the undersigned in the capacities set forth
below. The undersigned acknowledge that each shall be responsible for the
timely filing of such amendments, and for the completeness and accuracy of the
information concerning it contained therein, but shall not be responsible for
the completeness and accuracy of the information concerning the others, except
to the extent it knows or has reason to believe that such information is
inaccurate. This Joint Filing Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.